Technical Risk in the Uae: Internal/ External

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TECHNICAL RISKS

Internal

Saturation of the tourist accommodations. The rapid expansion of the tourism industry in the United Arab Emirates has increased the demand for construction of new hotel and resort accommodations. As a result of this growing popularity, one difficulty that may arise is an overwhelming increase of such facilities concentrated in the most prevalent tourist areas. The most popular tourist destination of the U.A.E. is Dubai, which is also known as the region’s commercial center. To highlight the recent influx of visitors to the area, approximately 2.8 million visitors travelled to Dubai in 2000, and approximately 6.3 million hotels guests were attracted to the area in 2008. There were 256 hotels available in 2000, and over 340 hotels operating as of 2008 (1). More facilities are required to accommodate the growing demands of increased tourist traffic, but how can these establishments attain success by expanding technological resources?

Strategies for managing risk. In order for hotels to maintain marketability amidst this saturated environment, hotels need to identify new strategies for differentiation. A successful method for handing this risk is to offer more contemporary facilities to attract guests. A 2008 executive summary of hotel establishment statistics reveals that 94% of hotel guests visit from areas outside of the U.A.E.(2). Traditional lodging facilities of the United Arab Emirates do not serve alcoholic beverages in accordance with cultural standards. Although these establishments have been losing revenue from foreign travelers to competitors who do offer alcohol (3), dry hotels could increase their appeal by offering modern conveniences to guests such as complementary wireless internet access and state-of-the-art fitness facilities. There also have been an increased number of four and five star properties constructed to attract visitors who value luxury. Well-known American hotel companies, such as...
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